Hi Multis
It’s Sunday again and that means time for your weekly dose of news in the Overview Of The Week!
I’ve noticed that some Multis get a bit nervous from these markets and I understand that. But the equanimity I talked about last week can really make you stand out from the crowd.
As they say, staying calm when everyone is losing their mind, you will win in the end.
As you probably know, I have a background in linguistics and literature. I have never shared a poem before, but this time, I think it’s very useful. It was written in 1910 by Rudyard Kipling and it’s a father talking to his son. But I think it’s a useful poem for investors as well.
Try to be this and be an example for others.
Articles In The Past Weeks
This is the third article this week. The two previous ones were about two stocks that dropped hard after they announced their earnings and I put a lot of effort in them. I was very happy to see that was appreciated a lot.
In the first article this week, I dove deep into Duolingo’s earnings.
The second article was also a deep dive, this time into Sea Limited’s earnings.
Memes Of The Week
Multi SkQ shared this in our meme channel:
I also liked this one.
Interesting Podcasts Or Books
Last week, I listened to the Intrinsic Value Podcast episode about Constellation Software.
In that episode, I heard they also have one about Chapters Group. I listened to it this week. You can find it here.
The latest episode is about Duolingo.
The markets in the past week
What did the market do this week? I think most of you will know that stocks generally dropped quite a bit.
As you can see, the Russell 2000 dropped the most, by a whopping 4.07%. The S&P dropped 2.02% and, surprisingly, the Nasdaq dropped the least of the three, but it was still down 1.24%.
For months, I have been saying that the market felt like 2021, when growth stocks were already down 50%, 60% or more and the indexes remained at or near their top. Is this the point of surrender for the indexes? You can’t know, of course.
The Greed & Fear Index dropped. It was already in Fear but close to Neutral. It is now close to Extreme Fear.
Quick Facts
1. Most Protection Ever
This week, I saw this chart.
This chart shows that in the last 16 years, there has never been a period with more protection bought than now.
Historically, that has been a good counterindicator. In other words, if so many investors buy puts, the market usually goes up.
On the other hand, if this were a percentage of invested capital, it would probably look a bit different.
All in all, it’s like with all data points. It could be true in the short or long term, but I wouldn’t invest much money betting on it becoming true.
2. Higher Oil: Bearish for Stocks?
The most discussed theme of the weekend was the higher oil prices.
Ben Carlson always has interesting charts. This week, I saw this one on the relationship between higher oil prices and stock market returns.
As you see, the S&P actually goes up more with higher prices.
Of course, again, there are many nuances here. Maybe the speed of the climb plays a role, the impact on inflation if it persists and so on. Still, an interesting chart.
The futures, though, look bad for tomorrow, though.
So, tomorrow could be an awful day. We’ll see. But things can always change fast.
3. Nu Holdings
This week, I found this table, which compares Nu Holdings (NU) after 5 years in Brazil and 5 years in Mexico.
This is another data point that the company keeps crushing it.
The company also announced that it would first target Brazilians in its US expansion, which is coming soon.
4. This Is Getting Crazy
With some news, I have to take a step back and think: what on earth did I just read?
Cortical Labs, a small Australian biotech, just demonstrated something that sounds like it belongs in a sci-fi movie. They grew real human brain cells on a silicon chip and got those 200,000 cells to play Doom. It played the 1993 first-person shooter where you have to navigate a 3D environment, spot enemies, and shoot them in real time.
Even crazier: a developer with no neuroscience background did it in about a week. He used Python through a cloud API. The neurons figured out basic gameplay faster than traditional machine learning algorithms. It took just minutes, not hours.
Cool demo, but so what, you might think, but the implications over the medium-long term might be big. Your entire brain runs very efficiently, much more efficiently, like 50 times or more efficiently, than the most efficient chips right now. So, this could be a huge efficiency leap once this becomes applicable at an industrial scale, if that ever happens, of course. It’s still very early.
The CIA’s venture arm, In-Q-Tel, is an investor in Cortical Labs. The first 115 units shipped in 2025. And if you don’t want to buy the hardware, you can rent access to living neurons through their Cortical Cloud platform. It’s a subscription service where you deploy code to actual brain cells from your browser. The cells are grown from adult skin and blood samples and reprogrammed into neurons.
Read that last paragraph again if you need to.
Biological computing could eventually leave traditional silicon in the dust when it comes to energy efficiency and adaptability. Neurons learn from tiny amounts of data, adapt continuously, and consume almost no power compared to GPUs.
Also, this was just 200,000 neurons. The human brain has about 86 billion. So, you see the potential.
We’re at the absolute beginning of this. And honestly, I find it both fascinating and a bit terrifying.
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